While working with an ADPI Task Force planning the upcoming American Dairy Products Institute and Chicago Mercantile Exchange Dairy Risk Management Seminar I began to reflect on how far we have come since the early days of the modern dairy futures contracts.

Fonterra has increased the volume of product that it plans to sell on GlobalDairyTrade over the next 12 months but has reduced the amount of product on offer for the next auction. The October 1, 2013 auction sees whole milk powder (WMP) and anhydrous milkfat (AMF) volumes as per forecast, but the volume of skim milk powder (SMP) on offer has been reduced from the previous forecast.

One thing’s certain on October 1st: Congress will have allowed the nine-month extension of the 2008 farm bill to expire. Added to that, in a sort of one-two punch, the Agriculture Department could be faced with shutting down operations that same day, should Congress fail to reach agreement on a stopgap spending bill.

The latest report published by Rabobank’s Food & Agribusiness Research and Advisory team, suggests a look at the global dairy situation for the third quarter of 2013 will find Chinese buyers eager to snap up more dairy product and tight supplies into 2014.

Cooperatives Working Together (CWT) has accepted 18 requests for export assistance to sell 4.041 million pounds (1,833 metric tons) of Cheddar, Gouda and Monterey Jack cheese and 992,080 pounds (450 metric tons) of butter to customers in Asia, Europe, the Middle East and North Africa.

The GlobalDairyTrade has recently published their September 13th Chart Focus which is a six-month publication that provides more information about GDT to the marketplace. Statistics released by GlobalDairyTrade show how volumes traded climbed rapidly to peak at close to 1 million tons before falling back to about the 900,000 ton level this year.

Dairy product sales are expected to reach $494 billion by 2015, and global milk production is projected to jump 19% by 2020, compared with 2010, according to a report by the Association for Packaging and Processing Technologies. The forecasted growth has driven 80% of dairy processors to invest in equipment upgrades, the study says, including robotic controls, energy-saving capabilities and inspection systems.

Australia's July milk production was down 3.5% and production of most dairy commodities followed suit. Cheese, which is a major product produced in Australia had reduced volumes of cheese with just over 17,000 tons of cheese produced, which was 14% less than July of 2012.